High Input Costs Drive High Food Costs

Thursday

May 19, 2011 at 12:01 AMMay 19, 2011 at 9:52 PM

By TODD STAPLES, Texas Agriculture Commissioner

It's no secret rising food prices are hitting consumers hard in the pocketbook. USDA has estimated that food prices will increase by 3 to 4 percent during 2011. In fact, a recent survey commissioned by the Food Research and Action Center and Tyson Foods found that one in four Americans worries about having enough money for food.

The truth is, there are many factors that cause higher food prices, including higher fuel prices and increased costs once the product leaves the farm.

While it's true farmers are receiving record prices for commodities such as corn and wheat, it's also true their input costs have skyrocketed. The rising prices farmers are paying for feed, fertilizer, diesel and other inputs are keeping pace with and driving the sale prices of their products. Prices for some commonly used fertilizers have increased by as much as 60 percent from a year ago.

Similarly, the price of a gallon of diesel - which farmers use to run combines, tractors and other equipment to harvest your food - has jumped more than a dollar in one year. As fuel prices rise, transportation costs from farm to store rise, driving up the prices we pay as consumers.

It's also important to remember that although farmers and ranchers are feeling the pain at the pump like the rest of us, they actually receive a very small percentage of each dollar spent on groceries. According to a recent USDA report, farmers receive less than 12 cents of every dollar spent on food.

High food prices affect us all. The next time you see a farmer or rancher, thank them for the fact that we, as Americans, spend less than 10 percent of our income on food. This compares to residents in Mexico who spend 22 percent and those in China who spend more than 30 percent. It is because of our farmers and ranchers that we have the safest, most abundant and most affordable food supply in the world.